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Malik opened a savings account and deposited 213.00. The account earns 6% interest, compounded quarterly. If he wants to use the money to buy a new bicycle in 2 years, how much will he be able to spend on the bike?

Solution

Solution

Amount : 239.94

Solution steps

Translate the problem into an equation:

A = 213 (1 + \frac{0.06}{4})^{4 \cdot 2}

213 (1 + \frac{0.06}{4})^{4 \cdot 2} = 239.94292 \dots

Round to the nearest hundredth:

239.94

Amount : 239.94

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